Weegy: What both of these policy options have as a goal is increasing or decreasing the level of business activity. It is most always preferable to have a productive growing economy but an economy can also be too productive. [ In that case the government may enact policies to slow down the economy.
In order to understand the functioning of these two policies we must again revisit the concept of inflation. Remember, inflation is when the value of money goes down. This means that it costs more money to buy products. Think of the economy in terms of supply and demand; the more money there is out there being spent, the less the money is worth. The supply is high, thus the value is comparatively lower. What this also means is that people are spending, and this is good. So what we have to do is find the proper balance between a healthy amount of spending and money in circulation and an acceptable level of inflation. Economists have placed "healthy" inflation ant 2 - 3%. This shows spending growth and expansion, any more and we begin to worry.
One of the most basis concepts of economics is Supply and Demand. These are really two separate things, but they are almost always talked about together.Supply is how much of something is available. For example, if you have 9 baseball cards, then your supply of baseball cards is 9. If you have 6 apples, then your supply of apples is 6.
Demand is how much of something people want. It sounds a little bit harder to measure, but it really isn't. To measure demand, we can use a very simple numbering system, just like the supply one. If 8 people want baseball cards, then we can say that the demand for baseball cards is 8. If 6 people want apples, then we can say that the demand for apples is 6. ] (More)

Weegy: We would recommend to add factors such as life expectancy,GDP per capita, death rate of children under 6 years old, education, poverty line, people under poverty line, Gini coefficient, green and rain forest, clean technology, new invention, [ new small business start-up etc. ] (More)

Weegy: Fiscal Policy
The economy can be impacted by the U.S. government through two major types of economic policy. The first type is called fiscal policy, which is economic policy instigated by the President or by Congress. [ The fundamental tools at the disposal of these branches of government are taxation law and government spending. By changing tax laws, the government can effectively modify the amount of disposable income available to its taxpayers. For example, if taxes were to increase, consumers would have less disposable income and in turn would have less money to spend on goods and services. This difference in disposable income would go to the government instead of going to consumers, who would pass the money onto companies. Or, the government could choose to increase government spending by directly purchasing goods and services from private companies. This would increase the flow of money through the economy and would eventually increase the disposable income available to consumers. Unfortunately, this process takes time, as the money needs to wind its way through the economy, creating a significant lag between the implementation of fiscal policy and its effect on the economy.
Monetary Policy
The second way the government can impact the economy is through monetary policy. Monetary policy is instigated by the central bank of a nation (the Federal Reserve in the U.S.) to control the supply of money within the economy. By impacting the effective cost of money, the Federal Reserve can affect the amount of money that is spent by consumers and businesses . ] (More)